First Consulting adopts process mining for continuous improvement

26 January 2018

While the amount of data available, both inside and outside companies, is constantly on the rise, its value is also increasingly acknowledged by organisations, as it is perceived more and more as ‘the new gold’. This does not mean, however, that organisations are realising the true value of data. Process Mining uses this data and creates insight into business processes, giving concrete opportunities for the continuous improvement of a company’s performance. Experts at First Consulting in the UK reflect on the power of Process Mining.

Process Mining creates insights to support continuous improvement

Process Mining is focused on supporting the sharp end of business operations. This includes helping to obtain real insight into customer processes; determining which deliveries take longer than desired and which departments have process bottlenecks; and creating propositions lead to the highest number of customer contacts. Additionally, from a compliance perspective, it offers information that was previously difficult to uncover or connect. Some working examples comprise of products/services that do not meet the agreed service levels, or are responsible for (customer) complaints; which departments do not perform the agreed checks and balances (e.g. four eyes principle); and finding how regions compare to one another (for benchmarking purposes)?

The figure below shows the difference between how a process is typically documented, the perception of employees on the ground, and how it works in real life.

Process documentation

Most managers have been raised with the well-known Accounting & Internal Control process book. This is also the basis for many audits to validate the quality of the processes involved. In practice, the process book is rarely, if ever, used after it is signed off. It also has limited use in training new staff members, because changes occur often and are not always incorporated in a timely manner. This leads to having a purely paper version of the truth. Process Mining enables a company to show the actual process as it is executed in all its varieties and it brings the paper version to life.

This clearly delivers much more value, enabling continuous insight and, as a result, further opportunities for improvement, while immediately allowing organisations to demonstrate the results of any improvements made.

The technique also facilitates process experimentation, prompting businesses to ask what is the commercial effect if they approach Group A through Channel ‘X’ and Group B through Channel ‘Y’? On top of that, it can also allow insights into departmental efficiency, or highlights which employees could benefit from additional training/support to continuously improve the company’s performance.

Such activities can be realised through the adherence to three key principles:

  1. Data driven: Use data to establish process performance (fact based). Don’t just act on gut instinct, but use data to confirm or disprove theories;
  2. Process focus: Always use this factual process as the starting point, instead of peoples’ opinions. Analyse how the process functions with adjacent processes to prevent suboptimal improvement;
  3. Results orientated: Stay results focused. Implement improvements iteratively, to be able to realise and celebrate short term milestones along your journey.

What: make significant steps with little means

Many organisations are not fully aware of the extent of their data, or the potential of that resource. Even where they do have a grasp of their data, they frequently argue that data quality is too poor to draw any conclusions. In practice, it frequently holds much more potential than organisations are aware of. It is First Consulting’s passion to help organisations maximise the potential of their data and use it to their benefit.

Continuous improvement cycle

The power of Process Mining lies in the fact that it only needs a limited amount of data to pinpoint areas for improvement. This can be illustrated using a real project example from an insurance company. By using a fragment of the administration log files (CaseID, TimeStamp, Activity) we visualised the process and subsequently eliminated process waste, for example by taking out double checks (the purpose of which nobody could remember) and reducing waiting time (by reducing steps that did not add any value from a customer’s perspective). The biggest gain, however, was that employees and team leads improved their knowledge and spoke about the way the process was executed and could be improved further. As a result, the internal lead time was reduced by 40%, with a corresponding increase in quality.

How: through a bottom-up approach, aimed at realising results

Data and applications are important tools, but the benefit they drive strongly depends on the way they are being applied within organisations. Having insight into the operational performance of processes also means insight into the performance of employees and managers. This can be perceived as a threat and sometimes drives resistance, which can manifest itself in delays to the overall change process. First Consulting champions the philosophy of improving the processes in conjunction with employees. To achieve that, the data is enriched with qualitative input from employees, providing more insight to the root causes and potential solutions.

In summary, to deploy Process Mining successfully it is essential to have insight into process flow variations, their rationale and finally, but most importantly, create and implement process improvements with the organisation. First Consulting prides themselves in not simply identifying potential improvements, but also in helping to realise this value for the organisation.

Related: First Consulting receives Expert Partner status from Mendix.

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Embracing technology can transform back office functions

24 October 2018

Organisations that successfully embrace technology can transform their back office functions, enabling them to operate more effectively and efficiently, while better catering to the needs of the business. Gillian Boston, Head of Business Consulting at global data management firm AutoRek, reflects on the tangible benefits that automation can generate.

Wherever one looks and in whatever industry sector that may be, some back office functions still appear to be operating in the dark ages. The reality is that many organisations are still reliant on manual processes and spreadsheets to fulfil their financial and regulatory obligations. In contrast, individuals do not think twice about booking flights on smartphones, using banking apps for personal finances, or shopping online. So why are some firms’ not embracing technology as readily when it comes to data management, reconciliations and financial controls?

Habitual work practices, perceived project timelines and costs, resistance or fear of change, and inexperience are some reasons why firms continue to support labour intensive processes and procedures. The average tenure of a chief operating officer (COO) is typically three years, which tends to discourage medium and long term planning that is needed for transformational projects. ‘If it’s not broken don’t fix it’ also springs to mind, but arguably these reasons are far outweighed by the benefits that automation brings.

The reality is that economic and competitor demands, increases in data complexity and volumes, continued speed of regulatory change and enhanced scrutiny from external audits are key factors that demand the effective and efficient workings of back office functions.

Embracing technology can transform back office functions

Over-reliance on spreadsheets

Regulators and auditors are becoming less tolerant of spreadsheets, and there are four very good reasons as to why this is the case:

·         Auditability – every data interaction should be date and time stamped against a user profile, which is impossible to do on a spreadsheet. The ability to go back to a point in time is a necessity – again challenging in particular if there are macros embedded in spreadsheets.

·         Automation – spreadsheets are wide open to manual intervention and user error. Macros can help to execute actions, but are typically poorly controlled and are only understood by the writer of the macro - in other words, macros are 'keyman' dependent.

·         Volume – spreadsheets have volume limitations and do not perform well as volumes grow. Key controls on workbooks that have thousands of rows and multiple columns with complex, poorly understood macros are not sustainable, maintainable or readily auditable. They will break at some point.

·         Version control – despite the reliance on shared drives, spreadsheets are prone to suffer versioning and multi-access issues. Couple that with spreadsheets being poorly backed up and existing on local hard drives, and again the susceptibility to the lack of control is magnified.

Quality, speed and flexibility – these are words that are not synonymous with manual, error-prone processes that often lead to the working of substantial backlogs.

Tangible benefits

It is however no secret that by embracing technology, employees can be redeployed to undertake more valuable work and they can learn new and increasingly important technical skills. What ensues is much more efficient and effective work practices, leading to growth in performance and an overall reduction in operating costs. From management of high volumes of data and reduction in fast-close processes to mitigation of operational and regulatory risk – robust automated solutions enhance controls and deliver efficiencies.

Integrity and validation of data, powerful automated reconciliations, workflow and case management, and timely and meaningful management information (MI) are all ‘must haves’ for sustainable and scalable solutions. Configured correctly, MI can be such a powerful bi-product supporting strategic decision making and the allocation of resources.

If people are continually faced with the manual amalgamation and consolidation of data from disparate systems, what individuals really need is transparency of data, good governance and robust audit trails to meet challenging reporting requirements. It is not unheard of that a process that previously took a week to complete, now takes little more than an hour from start to finish thanks to automation.

Embracing technology

There are countless headlines and articles on innovation in respect to processing, managing and working with data. 2018 is proving to be the year of RegTech, FinTech, digitisation, artificial intelligence, machine learning and technological revamp. The return on investment on an automation project is much quicker these days and as a result COOs are starting to act. The ability to replace tactical solutions with long-term strategic solutions, which take a more holistic approach to data management, stands firms in good stead and allows them to not only grow but to embrace the inevitable ongoing challenges of financial control and regulatory requirements.